The US economist: "Germany and Northern Europe will suffer more than Italy under Trump"

“For the president-elect this is in any case the last mandate, but not for his deputies and senators. So I expect an economic policy made of compromises, less aggressive than electoral promises“: this is the prediction of the American economist Paul Donovan at Ubs for Donald Trump’s second term, formulated in an interview with Repubblica.

“I expect that duties” to Europe “will increase selectively on the extent and impact that this will have on the individual countries and sectors affected, it is too early to make accurate predictions”, said Donovan. “Trump will aim with tariffs to defend American industry, in Europe the sector automotive and steel will certainly feel an impact”, is Donovan’s prediction, “if Trump decides to tax bourbon and wines he is making a political choice, I don’t expect it will impose tariffs on luxury bags or clothing where US industry does not have strong manufacturing.”

For the economist, given that consumers care about purchasing more experiences than goods, “Germany and Northern Europe will suffer more than Italy and the countries of southern Europe: in the north there is no tourism, they mainly produce and export goods, not experiences such as food, clothes and entertainment in general”.

For the ‘chief economist’ of Ubs Global Wealth Management, 2025 also starts under a lucky stardespite the geopolitical uncertainty and Trump’s arrival in the White House. “First of all, the fundamentals of the economy are good, inflation has decreased, spending has increased, consumption remains strong and interest rates have fallen and will fall further. I expect unemployment to remain low in 2025 and inflation to continue to decline carrying with it new cuts in the cost of money. As for President-elect Trump’s economic policy, the question we all ask ourselves is whether or not he will implement what he promised during the election campaign.”

For Donovan “the independence of the Fed is not in question” also because “Trump is very sensitive to market trends, diminishing the Fed would have a disruptive effect”: “I believe he will choose a governor more in line with his policies but not it will force things,” he explained.